Tropicana, page-102

I think you're dead right, everything you said.

I think the Board & executive failed on strategy & execution. Firstly, I've been banging on about the price they paid for the asset but secondly the way they structured the deal.....why couldn't they have negotiated a delay in settlement for the 60 days that Anglo Gold has to exercise its rights to Tropicana? By all means pay a deposit of $100-$150million if they had to but not undertake the discounted capital raise until they were sure they needed it. The break fee RRL is entitled to is peanuts compared to the value destruction through the increase in heavily discounted equity they raised. I'm not sure what's worse now, the deal completing or Anglo Gold exercising its rights and leaving RRL with a huge cash pile. The damage is done either way. I don't trust them anymore after this, not on capital allocation.

There's only one logical owner to Tropicana, Anglo Gold and even for them it has to be at a price that makes commercial sense. Anglo Gold should be able to trump any commercially sensible offer because they have what nobody else does- synergies. They know the asset better than anyone. RRL stated they though it was unlikely Anglo Gold would top their offer & for the life of me the only reason that would be is because they know 30% of Tropicana isn't worth $903 million. For those that still think this is a good deal for RRL, consider that and answer this for me.....why do RRL think Anglo Gold won't top them when they are 70% owner and operator? My answer is can't get the return they need- what's yours?

I wish there was something to like in this but I can't find a single thing and that in any deal is a rarity.